Private and Public Enterprises in the Economic Development of Pakistan

Abstract

Pakistan's economic structure presents the spectacle of mixed economy in which private and public enterprises coexist in the same and related fields of economic activity. While on the one hand, the government has adopted various measures to encourage and assist the development of private enterprises, it exercises at the same time large measure of direct and indirect control over private enterprise. From the beginning it was recognized that in view of great need for development there was ample room for both private and public enterprise and that both are desirable agencies for development. The first government policy statement in 1948 reflected the view that monopolies and public utilities were peculiarly suitable for nationalization, and that communication and transport services such as posts, telegraph, telephone, wireless, broadcasting, railways and air transport should be owned and operated by the government. In road transport, where both public and private enterprise coexisted at that time, and in river transport, which was entirely within the private sphere, the prospect of their eventual nationalization was not ruled out. With the exception of three other specific fields of activity-(a) arms and ammunition, (b) the generation of hydel power and (c) the manufacture of railway wagons, telephones, telegraph and wireless apparatus-private enterprise was given full scope to operate, though the government reserved the right to take over or participate in any other industry vital to the security or economic well-being of the State. Moreover, it was decided that if adequate private capital did not come forward in any particular industry of national importance, the government might set up a limited number of standard units [more] as measure of attracting private enterprise than for any other object.' In the restatement of industrial policy made decade later, an even greater emphasis is placed upon private enterprise.2 The 1959 statement pledges to give maximum scope to private enterprise in the development of the resources of the country within the framework of the national Five Year Plans. The fields reserved for public enteprise are again (a) arms and ammunition, (b) railways, air transport and tele-communications and (c) the production of atomic energy. River transport is reserved for private enterprise and no longer with any threat of ultimate nationalization. Road